Renewable companies must demonstrate that their commitment to environmental responsibility and sustainable development is genuine.

LONDON --
Sustainability is increasingly in the news and on the minds of corporate decision makers – and it applies not only to a company's products, but to its entire manufacturing, supply and distribution chain. And customers and shareholders want reassurance that their investment is supporting environmentally friendly policies and practices – or, perhaps more importantly, that it isn't supporting destructive ones.

Help is available for companies wanting to ‘go green’. The corporate sustainability service sector offers assistance with increasing energy efficiency, implementing sustainable procurement and complying with legislation. In a recent REW feature (see Vol. 14, No. 6, pages 47-50) we explored the rise of the ‘energy executive’ within existing organisations: new roles being created for sustainability managers, engineers and investment professionals in response to a growing awareness that – no matter how ‘green’ its products – every aspect of the way a company functions may eventually come under scrutiny.

The role of the sustainability executive includes both inward-facing and outward-facing responsibilities. It can be crucial not only to implement sustainable business practices – to ‘be green’ – but also to let the public know that you’ve done so – to ‘be seen to be green’. In many cases this is merely a matter of getting the correct information into the hands of customers and shareholders, but in some cases a company’s desire to be seen to be green has resulted in accusations of the dreaded ‘greenwash’.

The term, modelled on the older ‘whitewash’ (meaning to gloss over or cover-up scandal), is defined by Greenpeace as ‘the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service’. And greenwash is a media issue. For example, from 2007-2010 UK newspaper The Guardian famously ran a series of articles on greenwash, for which it invited readers to email examples of ‘exaggeration, absurd claims or downright lies that big business makes about its green credentials’. From the oil and gas and pharmaceutical industries to politicians, municipalities and national governments, no one was safe. The EU was the final entity to be tarred with the newspaper’s greenwash brush, in a 2010 story on its implementation of an eco-label in the form of a flower, designed to indicate environmentally friendly products. The Guardian reported that two of these EU-labelled products, both popular brands of copy paper, were actually made in part from wood pulp logged from a rapidly disappearing Indonesian rainforest.

But We’re Already Green!

Renewable energy companies might think they have less to worry about than other industries in terms of greenwash: after all, if the basis of your business is green energy, you’re already way ahead in your green credentials. However, there have been cases such as PV panel manufacturer Jinko Solar’s 2011 suspension of operations after local protesters called attention to high numbers of dead fish in a brook near one of its factories. In a televised interview, Jinko Solar said that rainstorms had caused containers of solid waste containing fluoride to spill over into the brook. The company apologised and temporarily suspended operations while fixing the problem, but the irony of a renewable energy company causing environmental damage was not lost on the international media.

When Viking Energy, an SSE subsidiary, proposed building a 550 MW wind farm in 2009 on the Shetlands’ main island as part of the UK’s plan to meet EU 2020 emissions targets, The Guardian pointed out that the proposed site, located on 187 km<sup>2</sup> of peat bog, was a natural carbon repository that, if disturbed on a large scale, could release more than 5000 tonnes per hectare of CO2 into the air, substantially offsetting any carbon reduction represented by the wind farm. Peat slides are a common risk in boggy areas, resulting in the oxidation of large amounts of peat, and the construction of roads, drainage areas and the turbines themselves could easily cause such slides, according to environmental experts consulted by the newspaper. Viking Energy’s own environmental assessment, however, stated that the risk of peat slides was ‘zero’. Due to this negative media coverage Viking Energy’s efforts to engage the local community with the project were widely viewed as greenwash. Although the project finally received planning permission in April, the community has formed a campaign group, Sustainable Shetland, that has vowed to ‘fight on’ against development of the wind farm.

In the bioenergy sector, public protest over the environmental impact of biofuel production and its contribution to the worldwide food crisis almost derailed the US industry in 2011. And global biofuel producers, especially Malaysian and Indonesian palm oil producers, have been dogged by reports of mass-scale rainforest destruction in order to make room for oil palm plantations. The Malaysian government has been criticised for its conversion of more than 1 million hectares of forest land into oil palm plantations; critics say this threatens to create enough carbon emissions to offset the carbon reductions represented by the use of waste from palm oil production in renewable energy projects (and by the government’s own carbon reduction programme). The Malaysian Palm Oil Council’s series of television advertisements, with the tagline ‘Sustainably Produced Since 1917’, was widely condemned as greenwash.

What Companies Can Do

These days, any corporate communication regarding a company’s carbon emissions or ‘green’ business practices may be viewed with a frisson of suspicion. One reason is that, while many companies issue mandatory and, increasingly, voluntary statements about their commitment to sustainability, most consumers have no way to verify these claims – opening the companies to charges of greenwash.

One option available to companies wishing to present their green credentials is external verification. For example, risk assessment firm DNV offers verification of sustainability reporting which, the company says, can help with inward-facing tasks by ensuring appropriate reporting processes are in place, and can address outward-facing issues by enhancing the credibility of a company’s sustainability report.

Green certification is another option. In the US, non-profit groups such as the American Consumer Council (ACC) offer their stamp of approval, and detailed reports for publication, to companies which meet sustainability criteria. But many smaller municipal and for-profit green certification agencies also exist, resulting in a bewildering field of options. The ACC recommends that businesses choose a certification programme that has itself been independently certified.

The European PV CYCLE programme is a voluntary take back and recycle scheme for PV modules (Source: PV CYCLE)

For companies that use wind energy in their organisations or production, there is the new WindMade consumer label, backed by a group of non-profit groups, trade associations and companies including WWF, AWEA, Bloomberg New Energy Finance and Vestas. WindMade offers two types of labelling for companies and organisations. The first identifies companies that use 100% wind energy, while the second labels those that use a mix of energy sources. The right to use the WindMade label is based on a company’s certified electricity use for the past year of operations. The standard is now available, while the first WindMade labels for products will be issued this year, the group says. The European Wind Energy Association’s (EWEA) annual gathering in April was the first event to be awarded the WindMade label.

In March, the US Solar Energy Industries Association (SEIA) released its Solar Industry Commitment to Environmental and Social Responsibility, a document that promotes the implementation of sustainability standards throughout the solar industry. Adoption of the document’s principles is voluntary, and includes compliance with company and supplier requirements in the areas of labour, ethics, health and safety, environmental responsibility, human rights and management systems. Participants on record include Suntech, SunPower, Dow Solar, Trina Solar, and Yingli Solar.

The European Photovoltaic Industry Association (EPIA) has a Sustainable Development Working Group, which aims to increase understanding of the PV sector’s role in positively contributing to sustainable development. The Working Group has produced fact sheets on the carbon footprint of PV systems and their energy payback time; a background document responding to common misconceptions about the availability of raw materials; and fact sheets on land use and biodiversity, water consumption, and external costs (forthcoming).

That’s What Gets Results

These strategies appear to work. Sustainability has been linked to shareholder value, and with building a brand as part of a long-term profit strategy, a good thing to have in these days of shakeouts and looming consolidation in high-profile renewable energy sectors.

In the UK, a survey in advance of the government’s Carbon Reduction Commitment (CRC) scheme revealed that 60% of respondents believed that participation in the scheme would give them a competitive advantage over other companies. ‘Our experience is that companies want to perform better than their competition in the public league tables when they are published,’ stated Bobby Collinson, managing director at energy procurement and carbon strategy consultancy Power Efficiency, which conducted the survey. ‘Nobody wants to appear behind a competitor, but the jury is still out on how this information will be perceived by customers. Of course, competitive advantage will be gained through improved recycling payments from the scheme and lower carbon usage, which reduces the costs to a company.’

A research report from the Economist Intelligence Unit (EIU) revealed that global companies that showed strong share price growth over a three-year period were more proactive on corporate sustainability issues than companies whose share prices stagnated or declined. And 57% of executives surveyed believed the benefits of implementing sustainable business practices outweighed the costs, although eight out of 10 expected any direct profit increase to be negligible. But, cautioned the EIU, sustainable practices do reduce costs, particularly the costs associated with energy expenditure. Sustainable practices can also open up new markets and improve a company’s reputation as part of a long-term brand-building strategy.

The survey also found that communication is key. Choosing from a list of 10 sustainability objectives, 61% of respondents rated communicating their company’s environmental performance to investors and stakeholders as a ‘leading’ or ‘major’ priority.

In a recent conversation, Jan Jacob Boom-Wichers, Benelux managing director at Norway-based REC Solar, discussed a life-cycle analysis which assessed the environmental impact of REC’s products, from manufacturing to recycling. The Energy Research Centre of the Netherlands (ECN) conducted the analysis and identified energy consumption as the most important footprint of a c-Si module. In response, REC developed its Fluidised Bed Reactor (FBR) technology, which uses granular polysilicon and, the company says, reduces energy consumption to less than 10 kWh/kg, compared with the 65-150 kWh/kg used in traditional production processes.

For REC, sustainability has paid off. ‘Our partners buy REC modules because of our commitment to the environment. That is very clear,’ said Boom-Wichers. ‘They want high-quality modules with the highest performance ratio, but in addition they want environmental values. Also with companies who want to improve their image of being a green company, [REC’s environmental stance] is definitely something they can relate to.’

A Greener Green Business Model

The ‘greener’ your business, the less you can afford not to ‘be seen to be green’. The renewable energy sector has risen to this challenge with some notable ‘greener green’ projects.

In the solar industry, the Europe-wide PV CYCLE initiative was designed to make photovoltaics ‘double green’. It was founded in 2007 as a voluntary return and recycling programme for end-of-life-modules, and to take responsibility for PV modules throughout their entire value chain. Its list of more than 200 members reads like a ‘who’s who’ of solar companies around the globe.

The recycling of wind turbine blades at the end of their life cycle was explored in 2005 by a consortium including energy consultancy KEMA, the Polish Industrial Chemistry Research Institue (ICRI) and HEBO Engineering, funded by the European Commission. The group built and tested a shredder that could handle 2.5 tonnes per hour, and make the materials in turbine blades reusable. But demand for the recycled material was low due to its reduced strength. While many believe that the EU will ultimately legislate the recycling of wind turbine blades, in the interim the industry is still actively seeking solutions to the problem.

Looking Ahead

While a global focus on sustainability means more business for renewable energy companies, it’s important for the sector to show that, in terms of environmental responsibility, renewable energy companies mean business. Addressing supply chain, manufacturing, product end-of-life and environmental impact issues before they become problematic is crucial for a ‘green’ business model. The initiatives underway are a great start, but as global sustainability competition accelerates, the roles of sustainability managers, planners and engineers will be vital to ensure that a company’s activities are not perceived as greenwash, but as truly green.

11 Comments

kimgerly - I was being sarcastic, sorry. I was referring to the fact that folks in the NG industry discount their methane emissions based on atmospheric residency time; they compare this to CO2 which, as the story goes, 'lasts forever'. This is quasi-scientific greenwashing - and not even accurate as you point out. Pressurizing of old gas fields and/or fracking has a much higher escape rate than conventional NG which substantially raises the GHG potential of 'clean(ER)' NG.

@ GeraldR What?!! I was confused by your comment, "... methane eventually dissipates in the atmosphere (but still 25x more potent than CO2 in 100 years so it's not really a GHG, is it." Let's be 'fair' and talk about residence time of gases in the atmosphere, essentially the time required to restore equilibrium following a sudden increase/decrease in a gas' concentration in the atmosphere. CO2 has a variable atmospheric residence time; it is estimated to be about 30–95 years. Measured relative to the same mass of CO2 and compared on a similar timescale, methane has an atmospheric lifetime of ~10-15 years, but a global warming potential of 72 over 20 years, 25 over 100 years and 7.6 over 500 years as compared to CO2. And to be really fair, yes, water vapor too qualifies as a green house gas, because it too can absorb and emit infrared radiation, even tho its residence time is only ~10 days. I suppose something should also be said about natural versus anthropogenic contributions of green house gases, but I'll let someone else chirp-in on this.

It is obvious that "greenwashing" is a long standing, persistent problem in our society and world. I think if I see another BP or Exxon, Shell, Chevron advertisement - or hear another nuclear proponent - talk about how "green" their company or preferred energy production method is . . . I'll throw up (or just die laughing). But what is truly mind-boggling is how long this sort of thing has been going on (most of my life). In the "energy crisis" of the early-mid seventies, there was a lot of interest in alternative sources of fuel, particularly for cars, and the Canadian Film Board released in 1974 a film profiling an elderly, ingenious British inventor who ran his auto often on methane that he produced from pig and poultry and manure, and released only C02 and water (http://www.nfb.ca/film/bates_car_sweet_as_a_nut). Yet, here we are in 2012, nearly 40 years later, and how many pig or poultry farms are utilizing their methane to produce energy - or selling it to happy customers? How many firms convert autos or other gasoline-ICEs to run on methane when desired as this man, Harold Bates, did 40 years ago? Where is the "Yankee" or "Euro ingenuity" that is so celebrated - and where is the joy and good will that would not only make such things profitable, but truly fulfilling? The link (above) to this film (which is free to watch) give one an idea of how so much ingenuity and goodwill is not only ignored, but completely forgotten. We live in a society and world that has little continuity - no real collective memory of such men as Harold Bates - memory that would guild us toward survival and joy, rather the endless threat of greater disasters like Fukushima and Deep Water Horizon, Ecuador and the Niger Delta, or the misery and death of war . . .

This might be a good forum to highlight the best of greenwashing. Here's a story that deserves a nomination. http://news.ontario.ca/mei/en/2011/03/ontario-helps-thunder-bay-clean-energy-plant-expand.html I think many can agree that if you take some biomass that has been nicely compacted and denatured and then dig it up and burn it to make power, that's mostly a bad thing. In fact, this particular government has a policy of shutting down coal fired power plants. Somehow, just burning biomass raw is 'clean'. Even though you get even less energy per unit of GHG, this is 'efficient'. Then the trifecta: getting users to time shift their consumption to off-peak hours is called 'conservation'. Then the salt ... taxpayers gifted $9.6M towards this scheme for producing 'inexpensive' power. Note that the available alternative in Thunder Bay is hydro-electric power.

ANONYMOUS
July 4, 2012

Perhaps, "beware of the greenwash traps". The CO2 trap i.e. getting sucked into endless debates about carbon pricing strategies: how about mercury credits, suphur dioxide pricing, and so on. How about we all agree to pay off our neighbors every time our pets dump in their yards. This whole pay to play scheme is just another way to padlock the EPA. Consider this leader from NRDC "Each year American power plants pump more than two billion tons of carbon dioxide into the air. EPA's new standards would reduce carbon pollution and protect public health." - carbon, carbon, carbon and, oh yah we almost forgot, there's some other stuff too. The 'clean burn' trap: there is no such thing. According to some, burning trash to make electricity is renewable and sustainable; conservation and recycling, not so much. No matter what you burn or how you burn it, not burning is a better option. The 'imperative burn' trap: we must burn, no matter what; conservation and efficiency are not options. Followed by, we must burn the cheapest stuff, although not burning anything would be even cheaper. Even the NRDC (which claims the high ground for itself) distinguishes between 'conservation' and 'clean energy' as two distinct things. America could patently burn much less and it's not the economy, stupid: while the burn increased 13X, the GDP grew only 6.5X (even less in constant dollars). And yet, we see one burner project after another with a nice coat of green paint.

Anonymous and Geno make a good point. 'When I use a word, it means just what I choose it to mean neither more nor less.' (from Alice in Wonderland). Of course, one way to be clean, green, eco-friendly, renewable, sustainable, etc. is to first apply your own definition to the words. Also, the CO2 thing is an interesting perversion/misdirection, in the smaller sense since CO2 is not the only GHG and a relatively low potency one, and in the larger sense since CO2 is one of the least toxic emissions produced by combustion. This allows natural gas to be described as 'clean' since it produces less CO2 than coal per kWh; ignore the fact that its major constituent is a much more potent GHG and typically 5% is vented prior to combustion. Even this explained away by invoking the fact that methane eventually dissipates in the atmosphere (but still 25x more potent than CO2 in 100 years)so it's not really a GHG, is it. When one looks at the total emissions from NG combustion, some toxic materials characteristic of coal are reduced or absent but some new ones are added. Interestingly, according to the data, some NG power plants are dirtier than some coal plants although NG is cleaner on average. It's just so easy to drop the 'er' modifier though. Unfortunately, none of these terms comes with quantitative rules. As if getting splashed with mud is 'dirty' while being coated in dust is 'clean'. Let's keep in mind that every activity has some impact - a fact spin doctors like to exploit - and nothing is as sustainable as conservation. Nothing is as sustainable as conservation and yet you rarely hear it described in those terms while burning waste frequently is.

Its a shame that 'going green' and being 'sustainable' to most people just means cutting CO2 (for human only long term benefit). Although better than nothing most people dont really consider the factor of protecting nature and all its diversity and those benefits that are in the long term vital. Its more important to the public that we keep expanding our population and covering the earth with 'progress' at the expense of other life forms. Albeit keeping CO2 low because that might have a direct impact on humans in our own lifetime. Its total hypocracy and very short sighted. But then thats humans for you. Yes I agree that Renewables are vital.

ANONYMOUS
July 3, 2012

The combination of pandering politicians and their embrace of subjective/ill-defined concepts like "sustainability", "green business practices" or "carbon limits" makes me nervous. While I'd love to see a prosperous and free world economy utilizing lots of renewables, I'd also hate to see a world economy that uses government force to unfairly penalize some countries more than others. Free market competition is a very powerful force for change. As conventional energy sources become more scarce and costly, as environmentalists claim is rapidly occurring, energy users will voluntarily switch to renewables due to cost pressures. Also, rather than simply considering the gross domestic energy consumption and emissions of a country, we should consider the contribution to global GDP the country produces from that energy usage. Is it a good thing if a country consumes 5% of the global annual energy production but only produces 2% of global gross economic output? To me, energy efficiency and economic productivity are far more important metrics than simple usage rates or emissions.

Look on the bright side: if being green has so much cachet that some see it as an advantage to the point of deception, that's a good indication of the general attitude of society. Bad actors that pose their products as meeting the public's expectations are nothing new. Consider the number of motor vehicles advertised as fuel efficient when, in fact, their fuel economy is pretty ordinary. Obviously, fuel economy is a perceived value in the minds of consumers and it is necessary to have it, even when they don't. 'Best in class', whatever that means. The only sad part is the cynicism that is brought to bear on entities that actually undertake green initiatives. One of the issues with using sustainable and eco-friendly business practices is that a non-consumptive business model ultimately has lower input costs resulting in increased competitiveness. I was not overly amazed when a large company's initiatives to produce it's own renewable energy (the local market having failed to meet their needs) was castigated because of the possibility that their efforts could be profitable. This is the puritanical side of greenies - the only acceptable green must be more painful than the alternative. Curiously,the need to recycle turbine blades can be a hotter topic than the need to safely dispose of a few million tons of toxic fly ash.

It is also not necessary for businesses to greenwash. All that low profile commercial building roofing is an economic asset that Futura Solar can put to work providing a significant portion of G&A energy expense, with a contribution to Direct Process energy. DCM-A&E can plan, price and propose and then fabricate, install and commission this system to put daylight on the factory or store floor, air handle (with incidental space conditioning & heat recovery) and still has room to host PV, SWH or PV/Thermal (water).

Great article Tildy - it seems not only are politicians starting to realize that the general public really care about climate change, but also that private companies, despite their sometimes "cold" image, are also caring because shareholders really realise the danger of disregarding the environment.

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